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Element Solutions (ESI) Q1 Earnings Beat Estimates, Sales Lag
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Element Solutions Inc. (ESI - Free Report) recorded first-quarter 2023 earnings (as reported) of 18 cents per share compared with 23 cents in the year-ago quarter.
Adjusted earnings per share came in at 30 cents in the quarter, which beat the Zacks Consensus Estimate of 29 cents.
The company generated net sales of $574.4 million, down 15.5% year over year. The figure missed the Zacks Consensus Estimate of $628 million. The company faced headwinds from the weakening of demand in smartphones and the broader electronic supply chain.
Element Solutions Inc. Price, Consensus and EPS Surprise
Net sales in the Electronics segment fell 23% year over year to $339.6 million in the reported quarter. Organic net sales were down 11% from the year-ago quarter’s reported figure.
Net sales in the Industrial & Specialty were down 2% year over year to $234.8 million. Organic net sales moved up 2%.
Financial Position
Element Solutions ended the quarter with cash and cash equivalents of $279 million, up 27.5% year over year. Long-term debt was $1,882.1 million at the end of the quarter, down 0.5%.
Cash from operating activities was $53.5 million in the quarter. Free cash flow was $44.9 million.
Outlook
The company expects adjusted EBITDA for second-quarter 2023 of roughly $120 million. ESI now expects adjusted EBITDA to be at the bottom end of its prior guidance of $510 million to $530 million for 2023.
It estimates full-year 2023 adjusted earnings per share of around $1.40. ESI anticipates generating free cash flow of roughly $275 million for 2023.
Price Performance
Shares of Element Solutions have lost 12.1% in a year compared with a 2.3% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ESI currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the Basic Materials space include Steel Dynamics, Inc. (STLD - Free Report) , Linde plc (LIN - Free Report) and PPG Industries, Inc. (PPG - Free Report)
Steel Dynamics currently carries a Zacks Rank #1 (Strong Buy). Shares of STLD have gained 15.9% in the past year. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 10.7% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Linde, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 9.1% for the current year. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 0.97% upward in the past 60 days. It has a trailing four-quarter earnings surprise of 5.9%, on average. The stock has gained 18.9% over the past year.
PPG Industries currently carries a Zacks Rank #2 and has a projected earnings growth rate of 17.5% for the current year. Shares of PPG have gained 6.2% in the past year. It delivered a trailing four-quarter earnings surprise of 6.8% on average.
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Element Solutions (ESI) Q1 Earnings Beat Estimates, Sales Lag
Element Solutions Inc. (ESI - Free Report) recorded first-quarter 2023 earnings (as reported) of 18 cents per share compared with 23 cents in the year-ago quarter.
Adjusted earnings per share came in at 30 cents in the quarter, which beat the Zacks Consensus Estimate of 29 cents.
The company generated net sales of $574.4 million, down 15.5% year over year. The figure missed the Zacks Consensus Estimate of $628 million. The company faced headwinds from the weakening of demand in smartphones and the broader electronic supply chain.
Element Solutions Inc. Price, Consensus and EPS Surprise
Element Solutions Inc. price-consensus-eps-surprise-chart | Element Solutions Inc. Quote
Segment Highlights
Net sales in the Electronics segment fell 23% year over year to $339.6 million in the reported quarter. Organic net sales were down 11% from the year-ago quarter’s reported figure.
Net sales in the Industrial & Specialty were down 2% year over year to $234.8 million. Organic net sales moved up 2%.
Financial Position
Element Solutions ended the quarter with cash and cash equivalents of $279 million, up 27.5% year over year. Long-term debt was $1,882.1 million at the end of the quarter, down 0.5%.
Cash from operating activities was $53.5 million in the quarter. Free cash flow was $44.9 million.
Outlook
The company expects adjusted EBITDA for second-quarter 2023 of roughly $120 million. ESI now expects adjusted EBITDA to be at the bottom end of its prior guidance of $510 million to $530 million for 2023.
It estimates full-year 2023 adjusted earnings per share of around $1.40. ESI anticipates generating free cash flow of roughly $275 million for 2023.
Price Performance
Shares of Element Solutions have lost 12.1% in a year compared with a 2.3% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ESI currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the Basic Materials space include Steel Dynamics, Inc. (STLD - Free Report) , Linde plc (LIN - Free Report) and PPG Industries, Inc. (PPG - Free Report)
Steel Dynamics currently carries a Zacks Rank #1 (Strong Buy). Shares of STLD have gained 15.9% in the past year. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 10.7% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Linde, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 9.1% for the current year. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 0.97% upward in the past 60 days. It has a trailing four-quarter earnings surprise of 5.9%, on average. The stock has gained 18.9% over the past year.
PPG Industries currently carries a Zacks Rank #2 and has a projected earnings growth rate of 17.5% for the current year. Shares of PPG have gained 6.2% in the past year. It delivered a trailing four-quarter earnings surprise of 6.8% on average.